We can expect an ongoing stream of announcements such as last week’s federal funding of $7.1 million for 74 new “affordable homes” in Waterloo Region – an Indigenous-led 30-unit project in Cambridge and 44 units in Kitchener in a project administered by the homelessness group OneROOF.

We can also expect none of it will do anything to address housing shortages nor the affordability crisis.

To be sure, there’s a need for social housing and supports for the community’s most vulnerable. As noted, however, these projects have nothing to do with making housing more affordable for the average resident of a region when single-family homes have topped a million dollars.

At the most basic level, demand is outstripping supply. The only cure is lowering demand, which essentially boils down to halting immigration and allowing the population to fall.

A new note from Bank of Nova Scotia chief economist Jean-François Perrault tells the story. We would need an additional 1.8 million dwellings in Canada for us to have the same number of homes per capita as other G7 countries.

“For Ontario to have the same level of homes per capita as the average in other provinces, over 650,000 additional housing units would be required,”he writes, noting the numbers become even worse when comparing Canada to other G7 countries.  “In Ontario for instance, it would take an additional 1.2 million homes for that province to have the same dwellings to population ratio as our international peers.”

Canada has the lowest number of housing units per 1,000 residents of any G7 country. The number of housing units per 1,000 Canadians has been falling since 2016 owing to the sharp rise in population growth. An extra 100 thousand dwellings would have been required to keep the ratio of housing units to population stable since 2016 – leaving us still well below the G7 average, according to Perrault’s research.

“The current situation in Canadian housing markets primarily reflects a chronic insufficiency of home supply that is temporarily exacerbated by pandemic-related impacts linked to record-low mortgage rates and a shift in preferences for housing by type and geography.

“In the three years leading up to the COVID-19 pandemic, population grew nearly twice as fast as new housing units were being built. That ratio improved somewhat with the COVID-related stall in immigration, but it is likely to reverse course once immigration returns to planned levels.”

Canada’s immigration numbers have now topped more than 400,000 a year, meaning there’s no way even wide-open construction would keep up with that pace. And wide-open construction isn’t likely – Woolwich has a slow-growth strategy, for instance – and is completely at odds with ersatz climate-change policies adopted by governments, including local municipalities.

On the surface, the increase in housing prices can’t be sustainable, especially not at the levels we’re seeing just now. Even in a pandemic, with all the job losses and economic uncertainty, the market is booming. Sure, there was a dip early on, but then the craziness returned crazier than ever.

We’ve seen some pandemic-related shifts in the market, with people working from home seeking more space. That’s translated into a measurable migration from the condo-ized downtowns of Toronto and Vancouver to the suburbs and beyond, in turn driving up prices even in rural areas.

It’s a trend that’s had an impact on real estate in Waterloo Region, with demand driving up prices, pushing people further afield into still-smaller communities.

Demand is outstripping supply, the latest surge fueled by FOMO – fear of missing out. As prices rise, some people panic, worried that they’ll be forced out of the market entirely by rapidly growing prices. That demand in turn drives up the price of housing. It’s a vicious circle that seemingly has no end.

Government policy could change things, of course. Large increase in interest rates would cool the market almost immediately. But given the current state of the economy, higher rates would come with numerous costs governments don’t want. But even in good times, our economy is built on borrowing, with Canadians borrowing to maintain their lifestyles – there’s no will to raise rates when it’s borrowed money sustaining our consumer-driven economy.

Moreover, governments are not keen to pay more for the debt they’ve incurred, particularly during the pandemic.

Housing prices have been over-inflated in part by easy credit, a situation the federal government temporarily moved on, but prices continued to rise. There has been some movement on creating more affordable house – rent-geared-to-income projects, for instance – but demand far outstrips supply (there are some 6,500 on a waiting list in the region alone).

Ontario’s Ford government has targeted planning and growth restrictions imposed by its predecessor as a culprit. Opening up more land to development and easing restrictions on developers would increase supply and, thus, lower costs over time. It’s a dubious assumption, particularly in the GTA where the influx of newcomers will undoubtedly outpace new construction.

Even leaving aside the environmental concerns and the benefits of axing sweeping policy restrictions imposed on all municipalities, regardless of whether or not they made sense locally, there’s every indication we’ll continue to see a pumping of the housing market at the broader public’s expense – sprawl, congestion, changed neighbourhoods – while government efforts do nothing to make more housing available, particularly the affordable kind.

There’s a gap between increasing housing prices and stagnating wages at the heart of affordability crisis. That’s not going to be solved by tinkering at the edges or pushing for alternatives to the postwar housing market that echoes the housing situation from that other gilded age where inequality soared a century ago.

And we’re certainly not going to build our way out of the problem, as Perrault notes.

“As we look to the future, we remain of the view that the chronic shortage of housing relative to the population’s needs will put upward pressure on prices and reduce affordability. This is not to say prices will increase every month. There are likely to be months or short periods where prices do not rise and perhaps fall, but our view is that prices will generally be on the rise until a better balance between needs and availability is found. There are encouraging signs, however. Housing starts are running well above pre-pandemic levels, though that pace of construction, if sustained, is unlikely to meaningfully close the gap between supply and demand anytime soon given the size of the gap to be closed, and an expectation of strong immigration growth in coming years. The available completion and population data for 2021, for instance, suggest some improvement in dwellings to population ratios across the country. There is, nevertheless, a big hole to fill.”